Analysis Of Banking Monetizing Sale In Islamic Law {Bay Al Tawarruq Al Masrafi} {بيع التورق المصرفي}

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Dr. Mohammad Nawaz (Al hasani) , Dr. Hafiz Muhammad Shabbir Ahmad , Hafiz Hussnain Khaliq , Amara Hanif


Banking system is very important for mankind society and it is facilitating human-being in export and import business and internal and external transaction and it is providing wonderful services in the development of social life and strengthening the relationship between the people and societies throughout the world.

There are two system of banking working affectively in the world: 1- The first is the conventional system of banking and it is based on the interest which is considered backbone of economy according to this system. 2- The second is Islamic banking system and it is growing nowadays in the world and it is free from interest which is considered basic reason for the destruction of economy.

Each banking system is required to maintain particular amount of its liquidity at every time and

Conventional banking system fulfills this requirement of liquidity by taking interest based loan from anywhere while Islamic banking system does not allow interest based loan, so it fulfills this requirement through different modes of financing which are permitted in Islamic Law and the monetizing sale is one of these tools for maintaining the liquidity instead of taking loan from other bank.

 The arrangement for purchasing a commodity on deferred payment from Islamic banks and selling it in the market on cash payment to fulfill the need  is called monetizing sale {Bay al Tawarruq}. It is an important instrument permitted by Islamic law to fulfill the immediate requirement of money for any individual though it is real person or fictitious person such as bank.

This arrangement is made by Islamic banks for those clients who need a loan from the bank and Islamic bank does not provide the loan {Qard Hasan} because money are deposited in bank for the purpose of investment and financing but not for loaning or advancing Qard Hassan without the consent of depositors and disposing property of others without their consent is not valid in Islamic Law.

This article aims to define banking monetizing sales and describe its elements and conditions imposed by Muslim scholars. The article discusses the ingredients of monetizing sale and explains it’s relevant and highlights it’s distinguishing features. It also elaborates the conflict of contemporary Muslim scholars explain their views regarding the validity of banking monetizing sale and analyzes their arguments in the support of their views and gives the preference on the basis of strong evidence and it also makes certain recommendations.

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